The 3DO Company

Hardware developer (1991-1996)

Trip Hawkins wanted to get into the hardware market after the software market exploded with interest thanks to his involvement at Electronic Arts. When the company was first founded, its original objective was to create a next-generation CD-based video game system specified as the 3DO, which would be manufactured by various partners and licensees; 3DO would collect a royalty on each console sold and on each game manufactured. For game publishers, 3DO's $3 royalty per sold game was very low compared to the royalties Nintendo and Sega collected from game sales on their consoles. The 3DO Company and its initiative received the backing of several industry figures including AT&T, Electronic Arts, Goldstar, Matsushita (owner of Panasonic), MCA, and Time Warner.

The launch of the first 3DO system in October 1993 was well-promoted, with a great deal of attention in the mass media as part of the "multimedia wave" in the computer world, the first player being a Panasonic model at the price of US$699 (equivalent to $1,600 in 2025). Poor console and game sales trumped the enticingly low royalty rate and proved a fatal flaw. While 3DO's business model attracted game publishers with its low royalty rates, it resulted in the console selling for a price higher than the SNES and Sega Genesis combined, hampering sales. While companies that manufactured and sold their own consoles could sell them, at a loss, for a competitive price, making up for lost profit through royalties collected from game publishers, the 3DO's manufacturers, not collecting any money from game publishers, and owing royalties to the 3DO Company, had to sell the console for a profit, resulting in high prices. As the console failed to compete with its cheaper competitors, game developers and publishers, while initially attracted by low royalties, dropped support for the console as its games failed to sell. Stock in the 3DO Company dropped from over $37 per share in November 1993 to $23 per share in late December. Though the company's financial figures dramatically improved in the fiscal year ending March 1995, with revenues nearly triple that of the previous fiscal year, they were still operating at a loss. The console's prospects continued to improve through the first half of 1995 with a number of critical success, including winning the 1995 European Computer Trade Show award for best hardware.

Third-party developer (1996-2003)

In January 1996, The 3DO Company sold exclusive rights to its next generation console, M2, to Matsushita for $100 million. Thanks in part to revenues from the sale of M2 technology to Matsushita and other licensees, in the first quarter of 1996 the 3DO Company turned a profit for the first time since it was founded, with a net income of $1.2 million. Over the second half of 1996, the company restructured to focus on software development and online gaming, in the process cutting its staff from 450 to 300 employees. President Hugh Martin was given full operating control, while Hawkins remained with the company as chairman, CEO, and creative director. The M2 would never launch, as Matsuhita cancelled it in 1997.

After selling the M2 technology to Matsushita, the company acquired Cyclone Studios, New World Computing, and Archetype Interactive. 3DO established a new office in Redmond, Washington devoted to PC games development, with Tony Garcia as its head. In mid-1997 it sold off its hardware business to Samsung for $20 million, making a final break from its origins as a console developer.

The company's biggest hit was its series of Army Men games, featuring generic green plastic soldier toys. Its Might and Magic and especially Heroes of Might and Magic series from subsidiary New World Computing were perhaps the most popular among their games at the time of release. During the late 1990s, the company published one of the first 3D MMORPGs: Meridian 59, which survives to this day in the hands of some of the game's original developers. Heroes of Might and Magic III (1999) saw unexpected success in Eastern Europe due to its low performance requirements, hotseat multiplayer and localization in Polish and Russian. In May 1999, 3DO opened up a European branch, entitled 3DO Europe.

Bankruptcy and legacy

3DO struggled in the early 2000s. According to the SEC, the company reported a net loss of over $10m in the nine months to December 2002. The company filed for Chapter 11 bankruptcy on May 28, 2003. Employees were laid off without pay. Three companies explored buying the company outright, but an ongoing SEC investigation into the accounting practices of the industry made this less attractive. Instead, the company's assets were put up for sale in an auction. Many of the assets such as game brands and other intellectual property were sold to rivals like Microsoft (High Heat Baseball), Namco (Street Racing Syndicate), Take-Two Interactive (Army Men) and Ubisoft (Might and Magic, Heroes of Might and Magic). Founder Trip Hawkins paid $405,000 for rights to some old brands and the company's "Internet patent portfolio". The Army Men brand sold for $750,000, then a high amount in games acquisition terms.

The company was void from early 2003, but its registered securities continued to exist until the conclusion of the SEC investigation in 2008. The SEC issued trading restrictions and revoked the securities in December 2008.

Some of the former 3DO IPs remained active for years after the studio's closure. The Army Men franchise was in use on console till 2008 and continued longer on mobile, concluding with Army Men Strike: Toy Wars in 2017. The Might and Magic franchise is still active under Ubisoft as of 2026.